AFRICA The Next Frontier – China, Russia and India

Is Africa ready to engage China, Russia and India? I’m not sure but the situation reminds me of a story I was told once. While working in Sierra Leone, a government official said that a man who only gives his wife 1 block (less than a penny) is setting her up to easily be taken away by other men. Because it only takes 5 block to turn her head. When one is used to getting and fighting for a raw deal, they’re not really in a position to negotiate anything substantial.

As we all know Easterly and Sacks have a beef between them that a bit reminiscent of old school rappers. And the whole thing centers around AID, do we need more or are there other factors involved? For another perspective see Paul Colier’s book, ‘The Bottom billion: why the poorest countries are failing and what can be done about it’. In either case, I wonder, is the problem in Africa exclusively one of external constraints or also one of attitude? Are African countries like 1 block ladies, will 5 block be enough to turn our heads?

If that’s true then what about the new Sugar Daddies in town; Russia, China and India? BBC has articles on China, India and Russia turning their gaze westward. According to Business Daily Africa even hedge funds like Renaissance Capital moving in.

But what are the implications? Publications like Vanity Fair and New York Times paint a complex picture. Vanity Fair implicates the Chinese in the Chadian border conflict with Sudan. A CGD blog shows China lending large amounts at higher interest rates. In yet another article the New York Times paints the Chinese as immigrants forging ahead in a new land. The article says:

‘Misunderstandings are common, however, and resentments inevitably arise. Africans in many countries complain that Chinese workers occupy jobs that locals are either qualified for or could be easily trained to do. “We are happy to have the Chinese here,” said Dennis Phiri, 21, a Malawian university student who is studying to become an engineer. “The problem with the Chinese companies is that they reserve all the good jobs for their own people. Africans are only hired in menial roles.” Another frequent criticism is that the Chinese are clannish, sticking among themselves day and night.’

Well this just reminds me of an another crop of traders in Africa. They didn’t turn out to be very helpful. Their gaze turned homeward and their businesses were extractive. If it is true that the Chinese, Russians or Indians or not primarily interested in AID with benevolent undertones. See Carol Lancaster’s essay for CGD ‘The Chinese Aid System’, June 2007. Then lessons should be drawn from the past. And while Raul Prebisch’s arguments are passé African leaders would do well to pay attention to how they do business just in case they sign away another 40 years to chronic underdevelopment.

I’m not saying there is a conspiracy to bring Africa down. The CGD article implies there is nothing much else here besides opportunism. See also World Bank Blog. But, if we’re looking for development to happen, then African leaders will have to break out of their ‘hustling after donor funds’ mentality. There is a difference between supporting a class of immigrants whose economic activities siphon money out and those who are able to contribute to the economy’s growth. The onus rests entirely on Africans to demand something more complex in their business deals. Something is wrong if development deals mean businesses that purely exploitative (see Seguino ’00 for more on exploitation and development) or contribute to absolutely no ‘learning by doing’ à la Mustaq Khan. Capitalism is about capital accumulation as much as it is about exploitation. But, I doubt we want the scales to be tipped to the exploitation side. 1 block politicians wake up, if China has any say in the matter, you’re officially back in the game.